Positive industrial news from China boost world oil prices

Oil&Gas Materials 1 June 2023 10:27 (UTC +04:00)
Positive industrial news from China boost world oil prices

BAKU, Azerbaijan, June 1. World oil prices show growth, and the positive trend is due to several factors, including encouraging industrial statistics from China and progress in solving the problem of US public debt, Trend reports.

The price for August futures for Brent Crude Oil increased by 0.54 percent, reaching $72.99 per barrel. The price of July futures for WTI Crude Oil rose by 0.48 percent, reaching the level of $68.42.

According to the PMI business activity index in the manufacturing sector of China, presented by the Caixin company, this indicator rose to 50.9 points in May compared to the previous month, where it was 49.5 points. Forecasts indicated a level of 50.3 points.

The value is above the 50-point mark, this indicates an increase in economic activity. China is one of the largest consumers and importers of oil in the world, and therefore positive data on its industrial activity have a positive impact on world oil markets.

Optimism in the markets was supported by progress in solving the problem with the US public debt limit. In the House of Representatives of the US Congress, a bill to raise the public debt ceiling was passed by a majority vote. After that, the draft must pass consideration in the Senate and, if approved, be signed by the president.

The risks of a US default are of global importance for economic expectations and also affect the prospects for oil demand. The decline in concerns about default contributes to the strengthening of oil prices.

"More general macroeconomic conditions really determine sentiment. Any factor that gives hope that oil demand will be stronger than expected will be seen as positive," senior commodity strategist at ANZ Group Holdings Ltd Daniel Hynes said, as being quoted by Bloomberg.